Chapter 1: The Claw Will Take Your Money

People can debate about active management versus passive management and the efficient market hypothesis, but the real danger is expensive. Fees will eat away at your profits. Choose index funds to reduce fees and expenses.

Chapter 3: The Advantage of Having Wall Street Marketing Blinders (and Where Can I Get Some?)

The phrase “beat the market” is misleading. When people say they beat the market, they are usually referring to the S&P 500 or some other similar index. The S&P 500, however, only tracks the top companies and does not fully represent the entire market. The S&P 500 also does not include dividends paid by these companies. So by simply including the earnings from dividends in your portfolio, you can say that you’ve beaten the market. Usually when managers say they beat the market, they are actually making an unfair comparison.

Chapter 4: Adults Behaving Badly

value = benefit – cost

The main point of this chapter is don’t be superstitious. This chapter goes over a several logical fallacies and human biases.

Golden Rule: Don’t act silly with money.

Chapter 5: Can You Be A Second Graders Portfolio

The answer is No. While it is not impossible to beat the market, there is no product that you can buy that will outperform an low cost index fund in the long term due to expenses, fees, and taxes.

Chapter 6: Beyond the Second Grader Portfolio

Hedge by investing in alternative asset classes that negatively correlate to the stock market such as bonds, real estate, and precious metal.